Pennsylvania Mini-COBRA Law To Take Effect July 10th

Paul Kazaras, Esq. on 07/07/2009

The Pennsylvania mini-COBRA law, signed by Governor Rendell on June 10, 2009, requires small employers (with 2 to 19 employees) who sponsor group medical insurance to offer employees and their dependents who lose those benefits on or after July 10, 2009, the opportunity to buy up to nine months of COBRA continuation coverage.  Under Federal law, COBRA is required only for employers with at least 20 employees. 

The 65% reduction in COBRA premiums under the Federal stimulus law, the American Recovery and Reinvestment Act of 2009 (ARRA), also applies to mini-COBRA benefits.  Employees involuntarily terminated between July 10, 2009 and December 31, 2009, may take advantage of both mini-COBRA and the 65% premium reduction.  Unlike the entitlement to the ARRA premium reduction, Pennsylvania mini-COBRA will not expire at the end of 2009. 

There are several differences between Pennsylvania mini-COBRA and Federal COBRA:

A right to Pennsylvania mini-COBRA is triggered if one of these Qualifying Events (QE) occurs on or after July 10, 2009:  voluntary or involuntary termination of employment or reduction in hours; dependent’s loss of eligibility; death of the covered employee; or the employee’s entitlement to Medicare.

To be a Qualified Beneficiary (QB) under mini-COBRA, an individual must:  be an enrolled employee (or his/her dependent) who was covered under the employer’s group medical plan for three months before the event; not be Medicare-eligible; and not be eligible for, or covered by, another private group health plan.

Following a Qualifying Event (QE), employers subject to mini-COBRA must notify each Qualified Beneficiary (and the insurer) within 30 days of the event.  The QB has 30 days after receiving notice in which to elect mini-COBRA.  If continued coverage is elected, the employer must notify the insurer within 14 days.  

Notice may be based on the model notices provided by the U.S. Department of Labor (DOL) (www.dol.gov/ebsa/COBRAmodelnotice.html), but must be modified to conform to the provisions of the Pennsylvania law.  The Pennsylvania Insurance Department and Department of Labor&Industry are working to have model notices available as soon as possible. 

Insurers must provide notice of the new mini-COBRA law to policyholders by August 24, 2009.  Group policies renewed or issued after June 10, 2009 will include a description of mini-COBRA rights. 

If you (or your client) are a small employer, you should:

·        Discuss the obligation to provide Pennsylvania mini-COBRA;

·        Contact the medical insurer to confirm that the insurer will offer Pennsylvania mini-COBRA by July 10, 2009; and

·        Prepare a mini-COBRA election notice incorporating the required provisions or work with the insurer on a notice which complies with regulations.

Click on the following link to the Pennsylvania Department of Insurance for more information, including Q&A:

http://www.ins.state.pa.us/ins/cwp/view.asp?A=1274&Q=550035&pp=3.